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European Stocks at Midday

European Markets

Positive sentiment in European markets was driven by a calming political environment in Italy, as well as a resolution to political discord in Spain

European stocks are higher across the board with the Euro Stoxx 600 up 1.10%, the FTSE 100 gaining 0.65%, the DAX rising 1.03%, and the CAC40 advancing 1.37%

All sectors in the Euro Stoxx 600 in positive territory

Financials (+2.24%), industrials (+1.23%), and materials stocks (+1.15%) are the best performers in the Euro Stoxx 600

Market breadth in the Euro Stoxx 600 is notably positive with 500 out of 600 stocks currently trading higher

Volume across European markets is relatively in line with usual levels (0.28% above 10-day average volume)

According to a Financial Times report, Spanish prime minister Mariano Rajoy has become the first prime minister in Spain’s history to be ousted by parliament following a successful vote of no-confidence. Pedro Sanchez will be sworn in as Prime Minister

Italy’s 5 Star Movement and La Lega populist parties have come to an agreement to form a coalition government, eliminating the need for a snap election. Guiseppe Conte will be sworn in as prime minister today

The Eurozone’s manufacturing PMI for May was in-line with expectations (55.5 vs 55.5 consensus)

Highlights from the European Bond Market

European bond markets are risk-on, with Italian, Spanish, Portuguese, and Greek treasuries rallying while UK, France, and German treasuries slide

Italian treasuries are rallying, with yields on Italy’s 10-year bond up 19.2 basis points to 2.554%

German Bunds are selling-off, as yields on the German 10-year have risen by 6.1 basis points to 0.394%

Yields on the France’s 10-year bond are up 4.5 basis points to 0.706%

UK treasures are lower today, and yields on the UK 10-year bond yield up 6.2 basis points to 1.289%

Greek treasuries are advancing, with yields on Greece’s 10-year bond down 12.2 basis points to 4.386%

Spain’s treasures are rising today, with yields on the Spanish 10-year bond down 13.5 basis points to 1.335%, after Spanish Prime Minister Rajoy was ousted